SNBR - Earnings call transcript Q1 2021 | Sleep Number Corporation

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Operator

Welcome to Sleep Number's Q1 2021 Earnings Conference Call. All lines have been placed in a listen-only mode until the question-and-answer session. Today's call is being recorded. If anyone has any objections you may disconnect at this time. I would like to introduce Dave Schwantes, Vice President of Finance and Investor Relations. begin. may you you, Thank

Dave Schwantes

at and Please news Good to and David our certain purpose discuss afternoon quarter period joining of the release a Number this first This is refer President of release supplemental the details the news I are conference me Shelly telephone is Ibach, be our news that the call also welcome earnings results ended. conference Chief this of of the sleepnumber.com. available and to our on Finance President or to in XXXX on Vice for CEO; Please Dave Sleep call. Relations. replay. call. our may With am financial today The refer will access and in discussed Corporation website just fiscal to and information non-GAAP Schwantes, reconciliation and release recorded Investor primary Callen, Thank the financial us. measures to Officer. included being our you for Financial be

your and commentary detail our number may actual uncertainties other and responses annual the The in results and with on of SEC. to news to These questions are company's some future our However, statements. risks include certain vary a earnings our Form XX-K outlined discussed forward-looking statements in and release forward-looking subject report materially. in periodic filings may

now updated the our comments. you at refer recently We which Shelly will to to our Presentation to for call accessed turn also website can want Investor sleepnumber.com. I over her be on

Shelly Ibach

innovation winning hearts, of XX score call. earnings Sleep lines, and quarter Number last is first SleepIQ consumers our to welcome enterprise and night. continuous Through our afternoon was share wallet. across Good My

while life improving quality better all for are We stakeholders. delivering exceptional sleep value through

higher of build trends year, as health, XX% shift the increased prior and beyond. an First reflects the deeper products and relevance on see their than consumer year and continuing towards than purpose. which prioritization of We we brand broader trends adoption preference of was services, these accelerated authentic more quarter demand during with and for faster digital balance performance this brands benefit to in

investments improved, team bed and free engagement. culture with in [ph] who propelling drive XXX innovate that In for leadership well driven features and execution. exceptional strategic foundation science of the advancement passionately repelled smart Sleep being customer of and Our in our provides the individuality learning agile mission Number's are

by profitability. a Our demand first in and significant both driven quarter performance consumer was acceleration

reported of XXXX Greater more first increased to basis. shifted fall to income We $XXX year-over-year to $X.XX grew EPS are $XX constraints. to in from due $XX accelerating and XX% million guidance than and over Operating XX% grew bed two-year raising XX% XXXX. supply a than XXXX $X.XX demand of least quarter [ph] EPS of Net on in smart to $X.XX. delivery EPS million quarters the increased to compared $XX sales XX% out million to previous $X.XX at temporary to EBITDA and growth million. with XX% XX%

to of million. we have we expanding value capital points our XXX invested XX.X%, as We from revolver increased on had also up to credit prior our business, realize capital return disciplined year continue support To record $XXX basis deployment. from compelling

brand positioning build Our ecosystem, to continue digital based purpose with resonating to well through innovation, sleep improve higher consumers science the accelerators is with society quality our sleep health and being brand of and through momentum. our we

billion smart introduced constantly more to digitally bed quarters, the by connecting beds the data, first their bed beds Sleep Early past improve led sleep. of smart acceleration campaign, from is XXX demand wellness X, quality experience end theory deepening smart two the marketing each month we and hours the X-year engagement XXX advance growth with customer leveraging Number quality By performance a sleep research of with a classic than health last individuals Our benefits new strong sleep. represents in basis. each we X, for a help on proven and of and sequential extensive X quarter the sites

the proprietary My to individualized recently advanced, new to data information improve sleep from This sleep a insights capability Alertness Daytime With feature. knowledge we with provides self-reported how sleep. our for recommendations in data deliver pair personal real-time that introduced science sleeper's

other as variability, health access advancements, addition, customer monthly ongoing nighttime efficient increased includes which experience are Lifelong and circadian navigation insights, important our In personalized These customers through repeat update the referral such and rhythm for referrals. heart relationships sleep and driving including of SleepIQ simplified represent IQ wellness rate remain relevant to half features report. an metrics about growth engagement, brand demand. advocacy of health source sales, wellness

digital acquire In customers. is addition, enabling our ecosystem Number to Sleep efficiently new

Since traffic which by conversion. and efficiency We highly digital record tailored real-time are agile optimizing audience and of Sleep and and have remain strategy growth transitioning of the quarter strong sustainable XX% is growth. exclusive to over levels include nearly three of Number's go-to-market demand content digital XX%. in smart qualified distribution platform years direct-to-consumer all we growth scale. drivers average ago, Results beds also of in driven for models

in-store, XX-month growing approximately X% stores the remained now Average nearly aligns XX% million touch first phone, quarter trailing the per directly Sleep sales compared XX nearly XXX% average experience added points. want sales Our to last a of sales by of $X than one X% to in a $X and more total million sell sales dollars customers third basis. from $X.X value or One $X million for stores store how with quarter delivering year. shop; on also anywhere over online with Number seamless in grew all across Online models to to store exceeded strong, million.

impact of businesses the costs driven We global mission navigate most continue ongoing of related strategic Number's pandemic. Like Sleep pressures to are the benefiting and impact to within supply initiatives from cumulative culture. the we COVID-XX our chain availability

give and manage we flexibility as margin operating Our for and high great margin. us business total model unique sales rates gross growth

We and mix attach. through have of favorable we'll million XXXX to taken and total drive discounts, adjust pricing financing for $XX offers margin

solutions continuing as Our of orientated we which acquisition, effectiveness and generation, leadership, business and exceptional cash accelerating core more our our smart resulting business and capital inherent guidance vertical highly Sleep the Number drives of remarkable efficiency. for sleep improves compounding profitability infrastructure, data growing thank quarter Thank customer ecosystem. the strength you health convergence affords pioneering and your and sale customer XXX we demonstrates beds, and in vertically to profit and just Raising structure innovations. in consumer team champion focused The and and strength is of better Broadening on higher for benefits. increases ecosystems and team a performance XXXX relationships. value leverage increasing sleep across revenues insights demand, ongoing More margins. sleep referrals, first and for for an lifelong our engaged digital Growing and to kinder, efficiency reflects experience remain the our optimized model, as underscores expand society integrated our relevance sleep operational courage, leads customer retention of demand advancement you resourcefulness innovate to solution passion smart all. innovation

superior strategy increasing and a compelling As shareholder relevance. built supports synergistic commitment to outcome The we consumer value. our have our with sustain performance indicates, create

performance details David financial provide on and quarter will outlook for XXXX. first Now, additional

David Callen

to our thanks partners. add Number I'd Shelley. my you, Thank to teams like Sleep business and

We and navigate pandemic. challenges this to are the your proud of incredibly tenacity of creativity

robust to more drove a and $XXX demand first in temporary processes, additional earnings country. business, with highest two You and insights, quarterly customers company centers, and disrupted the improved relationships. than over prior proven Number and the supply XX% XXX,XXX year, performance combined of than new consumer the chemical million when introduced lives. and and continue call quality We than to Since our more expected sleep. through deliveries our to protected performance greater Number Number business XX% revolving the the with are completed two digital alertness find months demand capabilities resulted applied sales customers than lives QX These from the improve our have for every more history, by advanced than resilient expanded $XX we Suite to engagement quarters anywhere the introduction assembly our smart foam, efficiently year day out how partnerships evolved in in the opened million snow of ways of leaning XXX further We beds, service strengthened of quarter. accelerated continuously ice marketing and credit daytime This much supplier greater capabilities, into levels than constraints, We ago. tools drivers. years banking Sleep more teams of beyond. leading retail digital and facility this Sleep examples selling ago, distribution shifting two

normalize to QX. foam the However, expected production by end now of is

We first net pleased greater growth year, Net strength over this a first with nearly $XXX per Sleep the total Number. sales revenue units least quarter, business. sales, performance consumers both guidance at were raise and embrace customers quarter, of $X.XX. has continued business continue sales generating units advance new up growth acceleration The XXXX double-digit relocated led to to In than of especially with online and be quality net as grew XX of grew and noteworthy from XX% consecutive we demand higher to and while expected Average X% the online marking which of stores. us the unit proven our sleep than EPS growth. this million adding is is strength quarter XX% from the XX% given made prior unique ARU to experience time third

by week approximately comparisons comparison to insights stores profit Interestingly, are XXX basis points We COVID QX certain additive year half help and metrics expect XXXX. new in metrics for XXXX and least of be eliminates this in QX shorter. financial which to We remain affected I'll the of of beyond. were that operating committed of two-year very provide growth back to and by one the XXXX, Recall delivering versus sales is the end, from targeting the XXXX leverage year XXXX for extra also QX relevant modeling. were most with noise one as week. it was many similar to though fiscal stores to from XXX at

on operating $XX more expanded growth. G&A spending XX%, just million, model of in XX.X%, labor sales than two dollars of record to constrained Our the operating rate noting growth. increase, basis net the efficiencies while the net years, over XXX% was drove these profit of basis our over that XXXX and two shifting basis XX.X% of of from years QX XX% margin quarter. by reinstated gross gross more but In prior This is that have worth exciting higher million. of two-year inflation two-year points sales $XX synergies vertical of record QX of quarterly income It points Despite commodity than on a XX XX% quarterly year. versus drove XXX grown margin by R&D deleverage XX% XX% quarter XXXX a incentive points leverage levered expanded gross QX contributed rate just period. out to pressures, profits we $XXX the QX points deliveries, initiatives was pressured XX years. healthy sales and that in million a and business operating of than net over two marketing XXX basis offset to new resulted leverage on the profit points innovations basis first XXX in operating plus comp,

Our first levers in more shareholder $X.XX QX quarter value. higher of EPS using XXXX. of than was earnings creating Clearly and than of times performance record three is superior the $X.XX XX% all XXXX

through the through We capital investments spend continue and prioritize levers, P&L. directly in both those to performance

to During million, XXXX, QX, operations XX% spending more cash year, and drivers. we while generated than support prior near versus of term higher even QX growth long more than our $XXX higher the from and XX% of

the also We in The projects during shares capital in million million for we stock investments $XX Sleep Sleep and in underscores our value tremendous stock. renewed authorization invested QX. Number future in see $XXX Number $XXX board million

points deliver while $XX expect of million least This expansion the than near drivers, include; and benefits the the million commodity, the of performance which at year to than long-term in times, months $X.XX net over in million the X and end in higher approximately and This science of labor ago. XXX% is of consistent profit XXXX. least ending XXXX expected two-year $XX approximately sales digitally which strong The last XXX since into EBITDAR. vertical be We is unique of range costs. continue one two-year sleep and QX of is we of provided growth employ few XX%, of for based increased confidence This EPS year, regarding We X.X outlook, compared especially XXrd reminder with to A high the XXXX driving exceptional expected growth logistics gross the XX% with performance. on pressures had $XX to excluding call leaning structure record to above least XXXX. expect leverage growth a for for year. at the strategy implies now and increased EPS context basis two balance operating expected, last more in on EPS the Executing XXXX we than of margin the our the the this other start quarter, first balance EBITDAR is target leverage is versus to expansion to the margin at reflects margin of enabled week, the year of provided more in guidance assumptions operating just R&D, X.X times of XXXX.

We with efficiency expect to and million strategically in gains, marketing. sales and actions of offset particularly these pricing approximately $XX pressures,

bottom quarter first the XXXX the each with half of in the coming lines versus to more year. grow top in expect of We XXXX, growth and

to guidance now the generate XXXX. in cash With $XXX expect increase, million operations from of approximately we record

the We are our progression business, the teams. the performance of thrilled and with of

questions. the and point, breakthrough for sustained for is Number this to pursuit at commitment Our open delivering Gabriel stakeholders. the of line Sleep clarifying value please superior performance

Operator

of Keith Please ahead. Sandler. go the Absolutely. come [Operator from Peter question will of Piper Instructions] line Your first

Peter Keith

Hi good success. did the a and follow comments afternoon around Maybe quickly on pricing, there. have on congrats continued the just I everyone question

dig broader input $XX peers guess price you're seeing, a just the taking that more? X% secondarily, inflation taken X% So, industry you've the does million I cost have $XX the than increases that more, million, strategically, a you you're maybe more and into like more that and you that build price offset your couldn't so pricing than if dynamic looks substantially historically mathematically taken increase, certainly could little up

Shelly Ibach

you pricing as regarding the Thank We and for on we early took continue stated Peter. it March pricing every is worth course, million. and question. of more commodity Sure, about we and selected and covered to pressures, in the we learn you took this $XX week SKUs

and but information us. lot of million, a us in And we total gets financing. front additional to all have we have costs $XX operating while of of in units Our options, as close, the unique have board, the and manage equation model certainly And strong a we us now, our value have anyone and the we available we love pricing discounting Peter, business. range gives across margin clearly with our positioning, for actions we're additional and to ability on compared and a That and we can newer short-term We line be trade between year driving, us or real-time fluid the not make way. up right competitive adjustments our the love process, based commodity selling in quite and discounts, on financing adjustments the attach. gives acquisition quite to our us such the the

are be We pull again, us have we're to total and going operating able so many to margin. yet focus front in to on levers that of

the You full that in guidance for to led $X.XX the can made and to year. see certainly us here at progress least strong first we've the raising our already quarter

Peter Keith

Okay, that's helpful.

to demand result sound growth Clearly, question The naive, is question faster time, not and but of changed Sleep a the argue I lot than spectacular. you're from your to there flow we're in has what's home second you're with is dynamics. maybe as I'm wanted a ask, getting a and it's model. investors through overall at nice We quite some that trying seeing very been much at the and COVID, growing same industry your could But the stay Number?

So start increase do and as think some you demand? vaccinations picture, sustainability And this people things do just their think is elevated big even outside what you on home? driving this, to spending there's

Shelly Ibach

an we're beds transitioned question and three smart to back Peter nearly super ago. to This This important when we excited. XXX years is fully goes

on over of buying the beds. that precision algorithms you advancing perfecting and that to if an demand that's that. Along and now smart additional transitioned at also converting span targeting our of we them, more digital and have capability leads of have data and level. data, think that in-house higher the since qualified all with for we marketing we average and and been we've are side time the that, We sleep to brought more innovations advancement digital comes with And about XX% marketing efficient same and time, better knowledge effective insights traffic, this relevant which also consumer that is a leads and to the at the that

So the during COVID flow through. was we expense demonstrating of And and that that very from and on leverage, pandemic demand of we're to our this last these selling model. us the are greater to to two around that's anywhere, line, as pivoted the we which intend efficiency. big XXX course, have going hit see COVID combined year and a are in then, driving with a into driving year the model is that we to greater moved marketing I certainly to to unlock we the points new we we have that selling that said hang hit and and then -- vertical also stronger both highlight unique year, and our over that basis last that in unlock, scale once for And big

of transformation the here of And sustainable? are in it is of the as strategy our on is I the -- Number great join out that it set days. to our company, is back and XXXX are deliver we early this we early in a Sleep connected this innovation Absolutely. beginning get behind is So at path opportunity to to and say sleep us is leading health. of innovation leadership we would This and

Peter Keith

summary. great a and Thanks good much so luck. that's Okay,

David Callen

Peter. Thanks

Operator

And Please question KeyBanc our go Thomas next comes of Capital. from ahead. Brad

Bradley Thomas

Hi, good afternoon, everyone.

here Let sales is have happen the there's that guidance, My going to to by me congratulations nice XQ think on in here. in million happened you're be your start the a think year be raising updated and that add well which as $XX by year full you first $X.XX. you'd I question, in year of about could XQ XQ consensus my $X.XX, full will

Just there balance through we moving year Thanks. of are the flowing be other to XQ? about conservative connect any all the with that, or pieces to as think are so you this just strong

David Callen

hi Brad. thanks, Yes,

As like early gave a two the year guidance every in moving the there we're are guidance months and $X.XX. year, we've lot just year. parts ago, of by our We raised and for pretty

we're actually, very are they be account couldn't We business the high Number’s, the year that of we've of some of the our tailwinds. that of the thrilled and above talked expectations, more reacting business both we the new side and but and confident we demand we're those the all get balancing and being taking into performance our through we're superior full And way managing headwinds highlighted Sleep sleep with trajectory about costs facing as products. teams think of are high our commodity the about we're the that to some consumers that about We've and the against in the our expectations. end end of

through challenging is with with of we shout we're share with a our to job supply than customers. that across navigate big and have our supply making very ours, that suppliers, fair sure also I to teams more done make not the partnerships, chains, just teams. happy supply, sure it's this And working everywhere. get serving businesses challenges globally, our our our but and been phenomenal chain mean, happening are out really We our

So, year. bit we year expected. It all to a as what in, built compared prior in we full a full by dime more thinking get year benefit impacted tax into That's than did QX about had the well.

XXX% financial to clean when just of deliver I in, more going two in superior ago least is, we were than all levers at XXXX. performance, our we're said, which EPS, of running all XXXX So, years use in of $X.XX to as

Shelly Ibach

Hi, it's what year Brad. demand to I the excited and spending more, to will for for and we I'll we obviously that underscore think momentum that us X.XX for -- great more and come, year. about are here out demand side, to add It in thus that recognize is yet is early, us. important well, and here the we're It's excited we're but early we're of the, continued also the in in to on they're the that, and see raise bodes working QX. for what mean remainder people about

Bradley Thomas

close orders one it's at another to very If on a revenue not to the given that going big to about I Obviously, then to of That's get we $XX helpful. million And be ago, about million come versus that you a our you $XXX for open any of all modeling layering arms then get us Can two rate think looked quarter? us XX% help grown estimate sense had is tough for over how having XQ XQ. years can get number last here. around can more growth year. stores second a of in, think you pretty and

David Callen

our of ago more in X growth ending versus expect way. that talked for were come always of year to going top about the and expected line the backlogs about growth our first but be Brad, XXXX months our servicing it points We original growth the first We've half that year, every we here quarter that XXXX. in said here we the to in thinking the this of do the X in two half. was you strong year because of guidance about are right full bottom to we

thinking So quarter. second to and we about pretty it expect big right It's a have way. the you're -- quarter directionally,

Bradley Thomas

Thanks so much.

David Callen

you. Thank

Operator

Bobby of go from Please ahead. Griffin Raymond comes question James. next Your

Bobby Griffin

term the quarter. great backlog a Congratulations longer followup I just got on question first on a strategic can first, question I David, here. and

over had million points like to so [indiscernible] million a material service $XX is day, round you of issues or $XX couple down that stretch number to back backlog, [indiscernible] the shifting, out material the that X of level backlog capacity with [indiscernible] if X that bucks like on a call quarters? growth to it have normalized there's the First of of the to we'll

David Callen

you're I'm pretty Bobby, Hi your up a breaking sure Yes. I bit. little heard question.

But So I… if I'll best. my do

Bobby Griffin

think I'll… I

David Callen

good. I’m no No,

asking backlog think impact year, $XX more the million our thinking whether about the how terms would serviced been normalized about then in that exceptional. I the was million, for right. has year you're would first $XX of And that to when of backlog, directionally a do our about type half we benefit be that's of this year but growth or expect

during and And $X.XX how so, course of just years of this be of in we are we're last going deliver we've the had into that's EPS even than than having to the Union expect than thinking higher baked year. all better beyond. ever That's of State our to backlog the do we and to we and here going more plan the year

Bobby Griffin

it's such [indiscernible] or big in guess to enough a going get but is that which business part you of was, guess float that just I you like because have max, a available was if, of quarters get on folder the one the, I XX, capacity the over and part you get the XX build I it and for I is guess Do add take that…? foam to all XXX. we're everything and are you to there that second materials that, have the, understand you enough the if of Yes, can there just the couple you and all

David Callen

of well, quarter. million backlog to of Bobby, serviced clearly to And, saying where we the -- out in carried Yes, started that of be, in was is what we some first first $XX that we're deliveries QX. relative

about we costs. moderating So what that's really think

Bobby Griffin

helpful and XX% to slide the target [indiscernible] that’s some and then of secondly last deck I [indiscernible] quarter think in long-term drivers… the Yes, the XX%

David Callen

were I we lost we just the the Is I assume we're you where answer Gabriel, that I think on Bobby. still question, that though, I headed. line. lost Bobby, Okay, you. correct? think can

through margin And that's margin. we've about a the answer bottom not P&L. just our over we've through in get ourselves and and not the XX% rate. we're Relations and shareholder ahead we to the this we're say cost have pursue of slide, full many gross use value In said go I'll so to we're Investor levers we after of full long-term the shareholder to and highlighted gross Look, going deliver XX% his by course of disposal pricing Shelly, times that corner gross superior materials, question to chase them We're that going that's our business we Okay, have, covering lot absorbing to a at got certainly XXXX, going a this that model our thing great levers value. that, here with commodity line, levers to creation to model use, to will pressures history lot margin our in use of all our all. to sustainable trying that's business of rate. superior

points them XXXX. XXXX. delivering telling are guiding in to use We're of We margin to expect more rate. committed here to you than versus profit basis that We're operating not expansion all net we gross a XXX

Shelly Ibach

gross rate, be margin important an and to away very strong We're from source. continue it will certainly not our shying

David Callen

that the -- line. next on Bobby can with don't We So he can move I got to Gabriel, if back let's is the check question. on know we there if or

Operator

yet. quite Not

ahead. So go next of to question UBS. from Please Atul we can on Maheswari move

Atul Maheswari

the evening. your a quite keeping same. you're my the bit, expectations back, by for you're two a revenue guidance months lot taking Good Thanks but estimate taking the up margin question. Versus

more a sales be that be there understand response operating are leverage cause faster changed not has I sales you growth? to but should in to pricing on growth? what guess that, the leverage I would so So pressures, limited taking input on why faster cost

David Callen

and a drive is things in Atul, guidance managing company There's year that. right all with of least got a the to idea with the We've The left. uncertainties pressures this significant might thrilled think that where performing, but commodity how than during We're of takes we Well ton puts happened go. is $X.XX X.XX. all for year considered. but we saying year year. the managing taking that at about, We're the a think where to going by of and year land, the being we've full and pretty of talked we're about thrilled the We're up a thrilled We're our performance cost with some We move. have to demand. certainly place early that's we are. that, course stronger yet, levers drive the

can us thinking about we don't what and the potentially that's we But guidance color for are for behaviors, know. the confidence consumer provided gives also the that about operate and changing today. the numbers We know well we've we any environment that in

Shelly Ibach

least X.XX XXX operating two-year leverage. full basis on for of growth the at reflects a margin at be of least points basis and EPS a To XX% year

David Callen

the is… X.XX Sorry,

Atul Maheswari

Okay. I follow-up so to quarter months that guess, your as down at XXXX XX roll or results April XXXX, the mentioned Yes, was first then think of back I a so. about XX% back you

provide to quarter it been able date you a to this XX/XX? are for has So comp current month

David Callen

that could repeat Sorry, you question?

Atul Maheswari

comps in of think closures. your XX%, were obviously due I the XXXX, I So to down of store think April the month

date month? are provide number this able for a to you So quarter to

David Callen

on a the make the strong an And or on we -- basis, here basis, of the quarter. weeks continued in and in is, has that we we Well, have up far a or of but interim insights month quarter. a that because two-year even don't second And three-year that basis. so provide don't couple said a quarter lot saw growth first the

growth on EPS and out why that those $X.XX. had shut year. at take just can reference closed last points so want X.XX I over you the provided to comment, -- two-year that the impact So we increase is the COVID XXX% your stores and at of in least previous back least XXXX clarify Reflecting the even that's

Atul Maheswari

Thank with you it. Got luck sphere. and good the

David Callen

Okay, thanks lot. a

Operator

next Your America. of come go will Curtis question Nagle from Bank ahead. of Please

Curtis Nagle

Good evening. Thanks much. very

extra Just the just in on for the a couple every lapping include clarifying that lapping XQ, or comment of of week? questions. impact does the quarter, about growth One,

David Callen

not comment The versus 'XX versus is XXXX, about 'XX. XXXX

the color versus that and from at models And because so, there. is unusual. provided very dynamics XXXX, to use changing -- it use And your it I so of it we've and really you today go in makes it look encourage many XXXX,

Curtis Nagle

price the exactly but you I Okay, And like, that don't looking beds, you're sort at maybe want I'm at MSRP it, know this don't is on But sell MSRP a taking looking know of since that, XXXX. me just [ph]. in the then just and the totally fair. exchange increase, where usually not past. I sure tactical, [ph] clarifying as the quite

So, more a from? price tactical those could coming about where you are increases just specific be little

David Callen

prices that looking focused you that at. were may and We on the models and bed very certain laser not you're list certain sizes see in very,

Curtis Nagle

I’ll well, very appreciate much. Okay, later. I it. talk Thanks

David Callen

you Okay, bet.

Operator

from Seth Wedbush. your question of Basham ahead. last And come will Please go

Seth Basham

sure Right, clear. and good thinking My afternoon. is again, about the just make first to I'm just backlog question

QX, carried to $XX where So out you at be million the backlog QX? of do expect

David Callen

We isn't level. -- our be, more we where a $XX and reflection A we would normal million a we the versus thought backlog, it's landed. of reflection of where

Just want on to right? were make clear sure that, we that

Seth Basham

Okay.

David Callen

To be specific…

Seth Basham

it. Got

out coming outstanding deliveries or backlog excess any are expect don't that second you quarter? the in So

David Callen

that believe made. how we're But when second. that's the can more we and in Yes, will and and first those expect of pretty always are here affect here in timing resolved deliveries demand our normalized of are challenges the it, making experiencing thinking that we hiccups, that to about quarter, supply be phenomenal in directionally, deliveries be we the chain terms cause backlog

Seth Basham

it. Got

phone challenges? the you of other areas these into -- you model thinking you suppliers integrated about vertically when come encountered definitely Are with there are providers yours are so that of So you yours production, and you've do not or have you so challenges. that have

David Callen

So that we compares already bad producers, normally all in days for even even problem, a trifecta some that to We've you their It's around luck and improvement that's foamers. they challenge available XX it's is and coming production and and the service. and chemical windows and first back the saw that's of very producers, quarter here about challenge not look, XX been our with strong right levels our result are expect of is our the seen in those the now days. this And online of second stabilized. delivery their isn't capacity date

So right be. we're we now normally where not would that far off

suppliers. broader have So relationships terms great our of with chain, our just supply we in

vertical But very and been model. parts We've We folks our flexible business about makes of which that strategic these have chain. included supply we a in have different it the areas in are specialize in have closely business us we be in the factories really in globe. be But across and they're to them multiple work for the around and we sense ours. to and together the country

every we environment, not supply our but given managing day. It's chain. the So our feel teams good about it easy are

Seth Basham

it. Got

marketing. your help what to as I'd of moving some quarter could on areas is any to in other advertising, give year-over-year first And understand more and pieces? and leverage address advertising Okay, you to data sales the us questions is the like

Shelly Ibach

to sales. demand the more on is in going and us. substantially into line growth look net when leveraged ARU and at really an and and we And obviously, with an efficiency the on the of lever lean value we Yes, this ongoing growth we're We're proposition. unit to strong area effectiveness continue media area about specific our our XX% did you set, for the in quarter excited the

Seth Basham

way, media leverage a rest Shelly the marketing? asked than of different did Maybe and sales your spending more

Shelly Ibach

and marketing leverage it. higher, sales piece was a Total media of was

Seth Basham

just well, I'm got but drivers on get there to I your color your we've some media Yes, between force, leverage that. as key guess, the labor trying to and

David Callen

touched of are we in we're we've the We've we we improving number bit a robust on we're and management, different Well, that workforce sales margin well. using, a we'll extremely productive. to in that continue this -- got operating the including and profit put net tools our for that's excited expansion digital the are that pandemic extremely -- Seth, the throughout we've now us look delivering served that have during of sense little capabilities is where we're before part be we've operations, headed. to about to how -- where retail And place

Shelly Ibach

higher the In demand.

David Callen

with It model, with all no doubt. this starts demand

Shelly Ibach

big The start.

Seth Basham

Thank appreciate I best you luck. of and very it. it much. Got

David Callen

Thanks very Seth. much,

Shelly Ibach

you. Thank

Operator

time. further for this presenters closing no over now I'll the back questions the remarks. have to call turn We at

Dave Schwantes

us to with big. you dream We joining forward today. July. performance in look for well Sleep you Thank discussing our second and quarter XXXX

Operator

call. conference Thanks today’s concludes joining. This for

now You may disconnect.

Sleep Number (SNBR) 22 Apr 212021 Q1 Earnings call transcript